TikTok Sale Deadline Hits With ByteDance Desperate for Time

ByteDance Ltd. is butting up against a long-awaited deadline that would subject the Chinese internet giant to possible Trump administration penalties if it can’t clinch a deal for the U.S. operations of its widely used video-sharing app, TikTok.

The Beijing-based company has asked the U.S. government to extend a Thursday deadline for ByteDance to divest its TikTok business in the U.S. President Donald Trump in August demanded the app be spun off, citing concerns about the security of American users’ personal information, and gave the company a 90-day timeline to complete a transaction.

That window is now closing, and while TikTok has struck an agreement to sell part of its business to Oracle Corp. and Walmart Inc., the deal hasn’t been finalized. ByteDance filed a petition in the U.S. Court of Appeals for the D.C. Circuit on Tuesday night, requesting the court step in to prevent the Treasury Department’s forced sale.

“We remain committed to working with the administration -- as we have all along -- to resolve the issues it has raised, but our legal challenge today is a protection to ensure these discussions can take place,” a TikTok spokeswoman said in a statement Tuesday. The petition also states that TikTok is committed to completing a deal, and confirmed that it most recently submitted a proposal for review on Nov. 6.

Thursday’s deadline is the latest checkpoint in what has been a long, complicated sale process, which may get more confusing as President-elect Joe Biden comes into power.

Trump has made the fight over TikTok a central front in a broader trade war with China, in particular an effort to crack down on the growing influence of China’s technology industry in the U.S. Trump first ordered a TikTok sale in August, and has threatened to ban the app if ByteDance couldn’t reach an agreement. That proposed ban has since been delayed twice -- most recently on Oct. 30, when a Pennsylvania judge issued a temporary injunction in response to a lawsuit filed by a group of TikTok users who make their living via the app.

But the Nov. 12 deadline to finalize a sale is still intact, and poses a significant threat to ByteDance, one of the world’s most valuable private companies. TikTok is one of the most popular apps in the world -- with more than 100 million U.S. users -- and is also ByteDance’s most important service outside of China. The company and its investors are desperate to finish a deal to avoid a ban in what has been a very valuable market for other social media apps, like Facebook Inc.’s Instagram and Snap Inc.’s Snapchat.

Trump gave his blessing in mid-September to a preliminary plan in which ByteDance would sell part of TikTok to Oracle and Walmart, creating a new independent company called TikTok Global. But that deal has been stuck in limbo for weeks, and was quickly overshadowed by the U.S. election. ByteDance reiterated that its most recent proposal would put American investors in charge of data and content moderation for U.S. users, according to Tuesday’s petition.

The way the original order was worded appears to require a divestment from ByteDance to be in place by the deadline -- not just an agreement. If the government does reach an accord with the company, it could exercise discretion around enforcement timing, said Aimen Mir, a partner at Freshfields Bruckhaus Deringer and a former deputy assistant secretary for investment security at Treasury, where he ran reviews for the Committee on Foreign Investment in the U.S.

“Usually when there is extended silence from Cfius, it suggests there’s no clear consensus within government on what the next step would be, but this has been an atypical case for awhile,” Mir said.

It’s unclear what would happen if a deal isn’t finalized by Thursday. If the deadline comes and goes without an extension, court relief or an agreement between the company and the government, Mir said the Justice Department would have to go to court and seek enforcement of the divestiture order.

Subscribe to our YouTube channel

Bloomberg Quicktake brings you live global news and original shows spanning business, technology, politics and culture. Make sense of the stories changing your business and your world.

To watch complete coverage on Bloomberg Quicktake 24/7, visit or watch on Apple TV, Roku, Samsung Smart TV, Fire TV and Android TV on the Bloomberg app.

Connect with us on…

Breaking News on YouTube